I just threw away a credit card offer. Ripped it to shreds, in fact. Not that this is unusual, even though I have no income and live in a foreign country (I mean, what could be lower risk than this, right?). I guess what’s actually unusual is that I took time to read the offer before shredding it.
It promised that I was preapproved for a card with "no interest until October of 2008". Hmm. Intriguing.
When I read the fine print, I saw it stipulated that the zero percent interest rate was only good on balance transfers from another card. The default rate on the card was over 21% interest. The penalty rate, the rate someone pays if they have been even one day late on a payment, was close to 30 percent. The fee for the balance transfer would be either 3%, or $75, whichever was less. The interest rate for all purchases or other cash advances would be 21%. After the expiration of the initial "teaser rate" on balance transfers, the interest rate on the balance transfer would also change to 21%. Moreover, it had a notice that the rate could be changed at any time for any reason, in the sole discretion of the bank. I didn’t look far enough to see if the card had an annual fee etc.
Judgment sometimes comes in the form of natural consequences. My personal life has many examples of this. For instance, if I didn’t spend so much time on the computer I’d be in better shape physically!
I’m sorry about the brewing economic crisis in the USA; I think it’s going to be worse than most people imagine. But part of me thinks that if the banks suffer terrible losses, they’ve brought it on themselves. Several days ago I proposed a sales transaction involving a 50 RMB plug converter as a case study in ways people from different cultures make economic decisions. I propose this credit card offer providing food for thought about "what is wrong with this picture."
Judgment day is coming. And it won’t be in the form of a lightning bolt from the sky!
As additional fodder for the mind, consider the following admonition:
If one of your brethren becomes poor, and falls into poverty among you, then you shall help him, like a stranger or a sojourner, that he may live with you. Take no usury or interest from him; but fear your God, that your brother may live with you. You shall not lend him your money for usury, nor lend him your food at a profit. (Leviticus 25:35-37)